Is Delta Airlines looking to dodge US taxes?

Delta Airlines, who despite cutbacks over the last decade remains one of the largest carriers to and from Florida particularly during the winter months could be looking to dodge US taxes according to a Wall Street analyst report. According to the report Delta would form a subsidiary based in the Netherlands which has a lower corporate tax rate than the US. This subsidiary would house many of Delta’s joint-ventures and investments in foreign carriers, including the UK’s second largest transatlantic carrier, Virgin Atlantic which Delta owns 49% of.

The idea of creating subsidiaries abroad is nothing new for US multinational corporations but is entirely new in the airline industry. Long the pride of the south that was known for its exceptional service and frequent flights from Florida to Atlanta and the Northeast, Delta has in the last two decades turned into a massive international carrier that invests in foreign airlines and engages in joint-ventures with major European carriers that have for whatever reason escaped serious regulatory scrutiny from both USA and EU.

Once an airline that had laudable principles, Delta has become a classic American-based international corporation. Forming shell subsidiaries overseas are a good reason to avoid a company if you believe in promoting American businesses and keeping money generated by US-based corporations in our system. Let us hope Delta does not follow through with this rather cynical idea to dodge US taxes and instead pay a lesser tax rate in the Netherlands.